Study on international money transfers, 2017
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International money transfers, or the money that people send abroad to their relatives and friends, constitute an important source of external funding for many developing countries. However, sending money abroad, especially when the amounts transferred are relatively small, can result in high transaction fees. Reducing the cost of sending money abroad has become a strategic focus at the international level as identified in the Sustainable Development Goals set by the United Nations.
Today, Statistics Canada is releasing data on international money transfers from Canada, along with an analytical report. Respondents to the Study on International Money Transfers (SIMT) included Canadian residents born in Official Development Assistance (ODA)-eligible countries—including naturalized Canadians, landed immigrants and temporary residents. Detailed information was collected, including the proportion of people sending money, the amount sent, the destination of the money transfers, sending costs and the reasons for remitting. The survey was sponsored by Global Affairs Canada.
Canadian residents born in Official Development Assistance-eligible countries sent more than $5 billion in cash transfers in 2017
Over one-third (37%) of people born in ODA-eligible countries sent money abroad in 2017. The results were similar for both men (38%) and women (36%).
The total amount sent abroad reached $5.2 billion in 2017.
On average, people sending money sent $2,855 to relatives and friends living outside of Canada, with men sending $3,250 on average compared with $2,470 for women.
The proportion of people who sent money abroad, and the amount sent varied by birth region, ranging from 11% for Canadian residents born in an ODA-eligible country located in Eastern Asia to 57% for those born in Southeast Asia and Oceania.
While a smaller proportion of Canadian residents born in Eastern Asia remitted (11%), those who did sent the highest average amount ($4,755), followed by people born in West Central Asia and the Middle East ($3,405) and in Southern Asia ($3,385).
Some remittances from Canada by residents born in ODA-eligible countries are sent to developed countries
Of the $5.2 billion sent to an ODA-eligible country in 2017, $1.4 billion was transferred to a country in Southeast Asia and Oceania, and $1.2 billion to a country in Southern Asia.
Remittances from people born in developing countries are often sent to their home country, but not always. The study shows that $761 million or 15% of the total money remitted was sent to higher income countries in 2017, that is, countries not eligible for ODA.
The top five countries to which Canadian residents transferred money were the Philippines ($1.2 billion), India ($794 million), the United States ($390 million), China ($292 million) and Pakistan ($236 million).
Remittances are mainly used to pay for living and medical expenses
As part of the study, remitters were also asked how the money they sent was used, to the best of their knowledge. In 2017, 59% of remitters said they sent money abroad to pay for living expenses (food, housing, utilities such as water, electricity and heat). For 43% of respondents, medical expenses were an important use of remittances while 35% sent money back home as gifts.
The use of remittances is linked to the socioeconomic conditions of the destination region. For 73% of remitters who sent money to the least developed countries, it was to pay for living expenses. The corresponding figure for those who sent money to higher income countries was 40%. In contrast, 45% of remitters to high-income countries reported that they sent money as a gift, compared with 24% of those who sent money to the least developed countries.
Money transfer stores are the most common method to send money abroad
The SIMT collected information on the method used by remitters to send money to relatives or friends living outside Canada. In 2017, 56% of remitters, with very little variation between women and men, sent their last money transfer of the year through a money transfer store, where they went in-person. An additional 8% of respondents used an online money transfer store to send their last transfer in 2017.
Other important money transfer methods included in-person banking (9% of remitters) and online banking (5%). The SIMT also found that bringing money when travelling, or giving money for relatives or friends to others travelling to another country or visiting Canada remains an important method for transferring money back home or to another country (10%).
In their last remittance of 2017, Canadian residents born in ODA-eligible countries paid an average transaction fee representing 6% of the total amount transferred
On average, the transaction fees paid by remitters represented 6% of the amount they sent the last time in 2017.
However, the sending costs varied by method of transfer and the amount sent, as transaction fees decline substantially when more money is sent.
For instance, the transaction fees for in-person banking represented 11% of the amount sent if that amount was equal to or less than $200. The fee for remitters who sent from $201 to $999 was 6%. This falls to 2% if the amount sent was $1,000 or more.
The channels used to send money abroad was also associated with sending costs. For example, among remitters who sent from $201 to $999, those who used in-person banking paid 6%, compared with 3% for those who sent a similar amount but used an online money transfer store.
Sustainable Development Goals
Since September 2015, Sustainable Development Goals (SDGs) constitutes the development agenda at international level. The United Nations, along with the international community, have committed to reducing inequalities within and among countries (SDG 10). To achieve this goal, international remittances play an important role. Therefore, developed countries committed to reduce to less than 3% the transaction costs of migrant remittances and eliminate remittance corridors with costs higher than 5%, by 2030 (SDG Target 10.c)
Data from the Study on International Money Transfers is an example of how Statistics Canada supports reporting on the Global Goals for Sustainable Development. This release will be used in helping to measure the following goal:
Note to readers
This analytical report is based on data collected in the Study on International Money Transfers (SIMT) among 23,000 respondents born in Official Development Assistance (ODA) eligible countries in 2018.
ODA-eligible countries consist of all low and middle income countries based on gross national income (GNI) per capita as published by the World Bank. All of the Least Developed Countries, as defined by the United Nations, are included in the ODA-eligible country list.
The list of countries eligible for ODA includes least-developed countries (for example, Haiti, and Senegal), lower-middle-income countries and territories (e.g. Indonesia, Ukraine, Philippines), and upper-middle-income countries and territories (for example, China, Colombia, Mexico). The SIMT sample includes respondents born in 127 out of the 166 ODA-eligible countries for reference year 2017. A complete list of the ODA-eligible countries for reference year 2017 is available online.
The survey collected information on demographics, labour market activities and income, money transfers outside of Canada, use of transfer methods, details about money transfers, and important factors respondents consider when transferring money.
The analytical report "Study on International Money Transfers from Canada" (89-657-X) and the infographic "Sending money to relatives or friends living abroad" are now available.
For more information, or to enquire about the concepts, methods or data quality of this release, contact us (toll-free 1-800-263-1136; 514-283-8300; STATCAN.infostats-infostats.STATCAN@canada.ca) or Media Relations (613-951-4636; STATCAN.mediahotline-ligneinfomedias.STATCAN@canada.ca).